Changes in Jan–Mar 2027 (Reiwa 9): defense special income tax, statutory reports, promissory notesWhat changes from January to March next year (2027)
For income arising on or after January 1, 2027 (Reiwa 9), the defense special income tax is created and the special reconstruction income tax rate is cut. The e-Tax filing threshold for statutory reports also changes from January 2027, followed by a tax-inclusive price display exception for food and beverages from February 1 and the end of exchange of notes and checks at electronic clearing houses on March 31.
- January 1, 2027Defense special income tax (1%) created; reconstruction income tax falls to 1.1%; 2027 tax table used
- January 2027e-Tax threshold for statutory reports becomes 30 or more; deemed filing of withholding slips begins
- February 1, 2027Tax-inclusive price display exception for food and beverages starts (through May 31)
- March 31, 2027Exchange of notes and checks at electronic clearing houses ends
Key points
- For income arising on or after January 1, 2027, the defense special income tax is created: withholding agents collect and pay an amount equal to 1% of the income tax to be withheld, together with it. The special reconstruction income tax rate falls to 1.1% (previously 2.1%) and its period is extended to December 31, 2047. The total remains 2.1%, and the withholding calculation method does not change
- For salaries paid on or after January 1, 2027, use the 2027 withholding tax table. The basic deduction used in calculating withholding on public pensions is also raised for payments due on or after the same date
- From January 2027, if you filed 30 or more statutory reports two years earlier, you must submit them through e-Tax or similar (previously 100 or more through December 2026). If a payment report is filed with the municipality, the withholding slip need not be filed with the tax office (deemed-filing exception)
- From February 1 to May 31, 2027, an exception allows tax-inclusive prices for food and beverages to be displayed at the 8% or 1% rate, on condition that the display does not mislead customers about the amount actually paid
- On March 31, 2027, exchange of promissory notes and checks at electronic clearing houses ends. The last issuance deadline at many financial institutions is September 30, 2026
What to do in practice
- Confirm that your payroll software is updated so the 2027 withholding tax table is used for payroll on or after January 1, 2027
- For transactions paid or received by notes or checks, review payment methods ahead of March 31, 2027
From January to March 2027, the way tax is taken from pay, shop price tags and the use of promissory notes start to change. A new tax, the defense special income tax, is added on January 1, but the reconstruction part shrinks, so the total share stays the same as now.
Points
- From January 1, a new tax called the defense special income tax starts. The reconstruction special income tax goes down instead, so the total stays the same
- From February 1 to May 31, there is a special rule that lets shops show food prices at either 8% or 1%
- On March 31, the system for exchanging promissory notes and checks between banks ends
What the words mean
- Defense special income tax
- A new tax starting in 2027. It is 1% of the income tax amount that is withheld
- Promissory note
- A paper document promising to pay a set amount by a set date
- National Tax Agency (NTA) / Japan Fair Trade Commission: NTA: Outline of the April 2026 (Reiwa 8) Changes to Withholding Income Tax
- National Tax Agency (NTA) / Japan Fair Trade Commission: NTA: Year-End Adjustment Page (2026, Reiwa 8)
- National Tax Agency (NTA) / Japan Fair Trade Commission: NTA: Leaflet on the Consumption Tax Rate Reduction for Food and Beverages
- National Tax Agency (NTA) / Japan Fair Trade Commission: Japan Fair Trade Commission: Optimizing Payments Across the Supply Chain Following the Discontinuation of Promissory Notes
This article previews changes that have already been decided and will take effect in the future. Effective dates and details can change, so please check the official source shortly before the date.
This article summarizes and explains materials published by government agencies and is not advice on any individual case. Rules can change, so for actual procedures and decisions always check the latest original materials and consult professionals such as tax accountants or labor and social security attorneys. English, Simplified Chinese and Traditional Chinese versions are translations prepared from the Japanese articles for convenience. If anything differs, the Japanese text and the original source take precedence.